PAG

Paragon Banking Group PLC

Banks First-pass screen £1.4bn

350/1000 Overall fit

AI beneficiary 35% 15

Operating leverage 25% 50

Valuation 25% 40

Downside protection 15% 50

First-pass take

Specialist lender with zero AI exposure and flat operating leverage (0.4% operating profit growth). Rising cost-of-risk (26bps up from 16bps) and regulatory charges signal credit stress. Strong RoTE (17.5%) and dividend growth (8.7%) offer some support, but lack AI tailwinds and growth momentum.

Flags

no-ai-exposureno-valuation-datarising-cost-of-riskregulatory-chargesspecialist-lenderflat-growth